How are Medicare claims paid

Understanding the complex world of Medicare can be a daunting task. Every day there seems to be something new added or changed. Figuring out how Medicare claims are paid is definitely at the top of the list.

However, it does have to be. Like everything you just need to understand some basics that will give you a good grasp on what you need to understand and you can build your knowledge from there.

Medicare on average will take 30 days to process each claim depending on if you need to make any adjustments or fix any mistakes. Medicare providers generally refer to this as a clean claim meaning it will just simply go through CMS’s system without any hiccups.

When you send your Medicare claim electronically you will get back two acknowledgment files.

999 File

The first will be a 999 file. This file will let you know that your Medicare administrative contractor (MAC) has received your electronic claim file. What you get back will either be that your 999 files have been accepted. You may receive a rejected 999 file in which you will need to contact your MAC and give them the reason codes in order to understand why your claim files were rejected.

277CA File

The other will be the 277CA file which is a response from the MAC. You will use the 277CA to see if there were any errors in the file. If you notice the file has been rejected you will need to translate the file in order to contact your MAC to understand why the file was rejected. The good news is Episode Alert does offer an option called Claim Alert. This will save you time and allow you to contact the mac with the reasons codes in order to fix the issues.

If 999 files have been rejected then you will not receive any 277ca files. You first have to fix the 999 issues before continuing.

Once you have fixed the issues and resubmit the claims files or if you were lucky enough not to have any issues at all, you will receive an 835 file.

835 file

An 835 file or Electronic remittance advice (ERA) will give you a summarization of all transactions that were finalized on a given remit date. Transactions can be in the form payments and takebacks, rejections or denials, and adjustments. This file will also need to be translated.

Once this is done, typically you will see the payment made the next day. You can use the EFT/ Check number.

Hopefully, this will help you out with some of the basics of how Medicare claims are paid.